7.000, be eee 31: 2008, the tevextment in Baguio Bruch account on the home office books basa balance of ee aso the activity i each ofthese accounts fr December, you find the folowing differences +000 beanch remittance tothe home office initiated cn December 27, 2008 was reported twice by the home A home office inventory shipment to the branch of 143,000 on D i ch of 45,000 on Decemebe 31, MK ice delerelr 2008 at P.54,000, The home off * The home office incurred P12,000 of adverts sing expenses and allocated 1/8 of this amount to the branch on December 21, 2008, The branch in advertising recorded balf ofthe oft Peer ‘advertising expenses incurred bythe home office soon ay. Bome office customer remitted P7,000 to branch. The branch recorded this cash collection in December 23, 2008, Menawhile, back at the home office, no entry as been made yet. * Inventory costing P11,500 was retumed by the branch to the home office on December 19, 2008, The billing, was ‘a cos, but the home office recorded the transaction at P1150, Compute the unadjusted balance of the House Office account as of December 31, 2008; a 382,650 ©, P396,150 bd P369,150 d. PA16,850 6) The following information are extracted from the books and records of Nikky Company and its branch The branches are at December 31, the fourth year of the company's operations. HO Books Branch Books Sales P 200,000 ‘Shipments to branch at cost 60,000 ‘Shipments from home office at billed price 80,000 Purchases 30,000 Operating expenses 60,000 Jnventory, January 1 From Homer Office at billed price 20,000 From outsiders 4,000 Unrealized intercompany profit 24,000 ‘There are no shipments in transit between the home office and the branch. Both shipments accounts are properly recorded. ‘The ending inventory includes merchandise acquired from the home office in the amount of P20,000 and P6,000 acquired from outsiders. The branch rent for the last quarter at P1,500 per month was paid by the home office and the branch was ‘hot properly notified. The true net income of the branch is ‘a.P 50,000 ©. P31,500 bP 55,000 d, P-46,500 ‘7)The gross profit rate used in the company’s third year of operation was: ‘8, 33-13% of cost ¢. 33-14 of selling price b, 25% of cost d, 25% of selling price 8) The home office in Mandaluyong shipped merchandise costing P21,690 to Caloocan Branch and paid for the freight charges of P3,980. Caloocan Branch was subsequently instructed to transfer the merchandise to Manila branch wherein Manila branch paid for P1,250 freight. Ifthe shipment was made directly from Mandaluyong to Manila, the freight cost would have been P5,050. How much is the amount of Branch Current to be debited in the books of the home office as a result of the interbranch transfers of merchandise? a PI80 b. — P25,670 & — P26,740 d. P25,490 9) EEG, Inc. established a branch in Taguig to distribute part of the goods purchased by the home office. The home office inventory shipped to the branch at 25% above cost. The following account balances were taken from the ledger maintained by the home office and the branch. EFG, Inc. Taguig Branch Sales P 336,000 P 144,000 (20% still uncollected) Beginning inventory 68,000 38,000 (1/3 from home office) Purchases 222,000 40,000 (30% unpaid) Shipments to branch 66,000 : Shipments from HO 82,500 u Operating expenses 68,000 11,200 (4/5 unpaid) 48,000 21,600 (10% from outsiders) Ending inventory